Latest news with #eurozone
Reuters
3 hours ago
- Business
- Reuters
Euro zone factory downturn eased in May, PMI shows
LONDON, June 2 (Reuters) - The downturn in euro zone manufacturing eased further in May, coming close to stabilisation as production increased for the third consecutive month and supported by a near-stabilisation in demand, a survey showed on Monday. The HCOB Eurozone Manufacturing Purchasing Managers' Index rose to 49.4 in May from 49.0 in April, marking a 33-month high and in line with a preliminary estimate but remaining below the 50.0 threshold separating growth from contraction. "The upward trend in the headline PMI is still continuing, pointing towards a recovery that is progressing," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Manufacturing output increased for the third straight month, with the output index holding steady at 51.5, its joint-highest level since March 2022. New orders approached stabilisation after nearly two years of contraction, while export orders reached a 38-month high. Companies scaled back job cuts with employment declining at the shallowest rate since September 2023 while purchasing activity shrank at its slowest pace in almost three years. Among the region's economies, Greece topped the rankings with its PMI at 53.2, unchanged from April, while Spain returned to expansion with a reading of 50.5. France approached stabilisation at 49.8, a 28-month high. "Production has picked up across all four major euro zone economies which really highlights how broad-based this recovery is," de la Rubia added. Germany remained the weakest performer among the major economies with a PMI of 48.3, though its manufacturing sector recorded one of the softest deteriorations in three years. Manufacturers' confidence about the year ahead rebounded to its highest level since February 2022 despite concerns about potential U.S. tariff increases on European imports. The future output index bounced to 61.6 from 58.0. Input costs declined for the second consecutive month with the reduction accelerating to the fastest pace in 14 months. In response, factories cut their selling prices for the first time since February. "The ECB is getting some tailwinds for its expected interest rate cuts. The industrial sector has started cutting its sales prices again after two months of increases, giving the central bank some extra room to move forward with its interest rate cuts," de la Rubia said. All 81 economists polled by Reuters expected the ECB to cut its deposit rate again on Thursday with a majority predicting at least one more cut after June.
Yahoo
3 hours ago
- Business
- Yahoo
Euro zone factory downturn eased in May, PMI shows
LONDON (Reuters) -The downturn in euro zone manufacturing eased further in May, coming close to stabilisation as production increased for the third consecutive month and supported by a near-stabilisation in demand, a survey showed on Monday. The HCOB Eurozone Manufacturing Purchasing Managers' Index rose to 49.4 in May from 49.0 in April, marking a 33-month high and in line with a preliminary estimate but remaining below the 50.0 threshold separating growth from contraction. "The upward trend in the headline PMI is still continuing, pointing towards a recovery that is progressing," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Manufacturing output increased for the third straight month, with the output index holding steady at 51.5, its joint-highest level since March 2022. New orders approached stabilisation after nearly two years of contraction, while export orders reached a 38-month high. Companies scaled back job cuts with employment declining at the shallowest rate since September 2023 while purchasing activity shrank at its slowest pace in almost three years. Among the region's economies, Greece topped the rankings with its PMI at 53.2, unchanged from April, while Spain returned to expansion with a reading of 50.5. France approached stabilisation at 49.8, a 28-month high. "Production has picked up across all four major euro zone economies which really highlights how broad-based this recovery is," de la Rubia added. Germany remained the weakest performer among the major economies with a PMI of 48.3, though its manufacturing sector recorded one of the softest deteriorations in three years. Manufacturers' confidence about the year ahead rebounded to its highest level since February 2022 despite concerns about potential U.S. tariff increases on European imports. The future output index bounced to 61.6 from 58.0. Input costs declined for the second consecutive month with the reduction accelerating to the fastest pace in 14 months. In response, factories cut their selling prices for the first time since February. "The ECB is getting some tailwinds for its expected interest rate cuts. The industrial sector has started cutting its sales prices again after two months of increases, giving the central bank some extra room to move forward with its interest rate cuts," de la Rubia said. All 81 economists polled by Reuters expected the ECB to cut its deposit rate again on Thursday with a majority predicting at least one more cut after June. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Wall Street Journal
6 hours ago
- Business
- Wall Street Journal
ECB Set to Cut Rates Again and Keep Options Open
The European Central Bank is set to lower its key interest rate Thursday, a cut that investors expect to be among the last in this sequence unless the eurozone economy is threatened by recession. Recent developments in U.S. tariff policy are unlikely to have changed the outlook for policymakers greatly.
Yahoo
8 hours ago
- Business
- Yahoo
ECB expected to cut rates again as Trump trade war rumbles on
The European Central Bank is expected to deliver its seventh-straight interest rate cut this week as US President Donald Trump's volatile trade policies add to headwinds for the sluggish eurozone. Even before Trump unleashed his on-off tariff onslaught on the world, the ECB had been bringing borrowing costs down as inflation eased. Worries about sluggish performance in the 20 countries that use the euro have increasingly overshadowed inflation concerns as higher rates have pinched businesses and households. Trump's tariffs have added to the sense of urgency. Europe is in the president's crosshairs over its hefty surplus in traded goods with United States, stoking fears about a heavy hit to the continent's exporters. Predicting a cut when the ECB's governing council meets Thursday, HSBC said the eurozone's "near-term outlook has deteriorated on the recent US tariffs announcements and related uncertainty". Analysts expect another quarter-point reduction that would take the Frankfurt-based institution's key deposit rate to two percent. But observers believe the June cut could be the final one in the current streak, with the ECB likely to pause at its next meeting in July to take stock of the latest economic developments. The ECB's series of cuts stands in contrast to the US Federal Reserve, which has kept rates on hold recently amid fears that Trump's levies could stoke inflation. - Global order 'fracturing' - Trump has already hit the EU with multiple waves of tariffs -- it currently faces a 10-percent "baseline" levy as well as 25-percent duties on cars, steel and aluminium. He has paused even higher rates on the EU and other trading partners to allow for talks, momentarily easing some of the tensions that had roiled global markets. But in a sign the trade war may be far from over, he threatened last month to swiftly impose a 50-percent tariff on the EU -- only to delay the move a few days later to July 9. Highlighting the alarm felt in Europe, ECB President Christine Lagarde said last week that the global economic order backed by US leadership was "fracturing". "Multilateral cooperation is being replaced by zero-sum thinking and bilateral power plays," she said in a speech in Berlin. But the ECB faces a tricky task in protecting the eurozone from the mercurial US president's trade policies while keeping inflation stable. Euro-area inflation was 2.2 percent in April, slightly above the ECB's two-percent target and higher than expected. May's inflation estimate will be published by Eurostat on Tuesday ahead of the ECB meeting. But most recent signs suggest price pressures are easing faster than previously thought, and the ECB is expected to cut its inflation predictions when it releases its own new economic forecasts Thursday. - Downward pressure - Most analysts expect Trump's tariffs to add to downward pressure on eurozone inflation, particularly as it might lead China -- facing the highest US levies -- to redirect inexpensive manufactured goods to Europe. The ECB is expected to cut its growth estimates Thursday due to the impact of the trade war, after the EU slashed its forecasts last month. While investors will be on the lookout for any clues from Lagarde about the ECB's next move, analysts warn that heightened uncertainty means she will give little away. The meeting will likely also produce questions over the future next moves for Lagarde. The former head of the World Economic Forum Klaus Schwab told The Financial Times last week that he had spoken with Lagarde about her taking over as head of the organisation. The ECB brushed away the rumours, saying Lagarde was "determined" to see out her term at the helm of the central bank. sr/sea/rmb/dhw
Yahoo
3 days ago
- Business
- Yahoo
Eurozone disinflation on track as price pressures ease in Germany, Italy and Spain
Consumer price growth in Germany held steady in May, while inflation eased in Spain and Italy, reinforcing expectations of a broader disinflation trend across the eurozone. The preliminary figures released by Germany's Federal Statistical Office on Friday show that annual inflation in the eurozone's largest economy held steady at 2.1% in May 2025. The reading came in slightly below analysts' expectations of 2.2%. On a monthly basis, German consumer prices rose by just 0.1%, a sharp slowdown from April's 0.4% increase and the weakest gain since January. Core inflation, which strips out food and energy, is estimated to have risen by 2.8% year-on-year, indicating that underlying inflationary pressures remain more resilient. Disinflation trends are also visible across Southern Europe. In Spain, preliminary data show the annual consumer price index fell to 1.9% in May, down from 2.2% in April and under the 2.1% anticipated by markets. The deceleration was largely driven by lower prices in leisure and cultural services, as well as more modest increases in electricity and transport costs compared to the same period in 2024. Spanish core inflation also edged down by 0.3 percentage points, settling at 2.1%. Italy recorded an annual inflation rate of 1.7% in May, slipping from 1.9% in April and in line with consensus forecasts. The latest national readings reinforce expectations that euro area headline inflation will ease further when the aggregate May data are published next week. Median economist forecasts point to a decline from 2.2% in April to 2.1% in May. Goldman Sachs on Friday lowered its forecast for eurozone inflation to 1.95% year-on-year, down from a prior estimate of 1.99%. The bank also revised its core inflation forecast downward by seven basis points, to 2.37%, citing subdued underlying pressures in Germany. With inflation across the bloc moving further closer to the European Central Bank's 2% target, the data add weight to expectations that the ECB may continue to ease interest rates at its next week meeting. The euro traded flat at 1.1335 against the dollar after Germany's inflation print, though it remained 0.3% down on the day. European government bond yields were little changed, with the German 10-year Bund yield steady at 2.53%. Equity markets showed mixed performance. The Euro STOXX 50 index dipped 0.4% by mid-afternoon, on track for a broadly unchanged week. Germany's DAX, however, gained 0.2%, climbing back above the 24,000 mark. In other news, oil prices fell sharply amid speculation that OPEC+ could increase production by more than 411,000 barrels per day in July. WTI crude futures dropped over 1.5% to $60.2 (€55.3) per barrel, while Brent slid below $63 (€57.9). Meanwhile, geopolitical risks resurfaced after US President Donald Trump accused China of violating the bilateral trade agreement, reigniting concerns over potential tariff escalations. Error in retrieving data Sign in to access your portfolio Error in retrieving data
